The secret to your organization’s success is rarely more data.
I woke up this morning and stood on my bathroom scale. The scale is, like many things nowadays, networked and bluetooth’d. It takes my weight, heart rate, body fat percentage (don’t ask), water percentage, and something called “pulse wave velocity” that I’ve yet to understand or investigate. It logs all that data for me to shamefully view on my mobile phone whenever I like, thanks to an app that connects to my bathroom scale.
An APP that attaches to my BATHROOM SCALE, people! The United States landed a man on the moon using slide rules to calculate, and here I am today with a scale that can instantly dispatch my disgrace around the world.
But it isn’t enough for information to simply be collected and “there”—it’s what you do with it that matters. And on that note, let’s shift from the topic of my body weight (nothing to see here, folks).
Data rich, insight poor
Modern institutions have astounding arrays of data sets to access. The sets are often not only overwhelming but competing as well. One client we serve measures revenue at least three ways, and gross profit margins can be viewed in at least three more ways—as in, we could apply three different margins to each of the three different revenue stream metrics.
Management teams have access to operational statistics, people statistics, economic data, customer surveys, sales force metrics, supply chain metrics, and countless additional data bases and data points. They can, quite literally, send measured data anywhere, anytime.
So-called “big data” is here—but it isn’t always what it’s supposed to be. That’s because there’s a paucity of insight accompanying that data. For all the richness of data at our fingertips, we’re poor when it comes to insight. In the worst cases, we are paralyzed by the sheer volume of data we can access.
At one client we recently served, a long-range forecast of a global market turned into the ultimate merry-go-round, as the forecast assumptions were tweaked and adjusted to the point where debates raged about long-range global growth rates and whether they should be .1% higher or lower over 10 years. The debate, while comforting to those involved, didn’t really matter.
That, my friends, is the consequence of being data rich and insight poor. And it’s a frequent problem.
So, what’s an action-oriented executive to do? I’ll put it simply: Know when enough is enough.
Sure, employ data scientists to ensure you’re getting the right cuts of data and analysis, but be sure that you’re also focused on insight. That means you’re identifying meaning in all those numbers you can pull. Just because you have access to mountains of data doesn’t mean you have to (or should) use it all!
Bill Clinton famously wrote that he got involved in some unsavory executive behaviors because he could. In other words, he engaged in unproductive activities because his great power enabled him to.
Many of today’s executives, analysts, and advisors participate in navel-gazing exercises that result in really cool charts but no action because they have access to never-ending data and capacities to manipulate it, without the will to stop and ask two key questions:
- What does the data we have mean? Interpret data for insight. Don’t just admire data for merely existing.
- What would more data really do to improve our understanding of that meaning? Analyze for decision-worthiness. Think of data availability as a question of “enough to make a decision” vs. “enough to make a comfortable decision.” By the time you make a comfortable decision, the competition is already there.
Our mission at WGP is “to improve our clients’ strategic positioning and enduring performance by providing practical strategic data, analysis, insight, and advice to top management.” It’s true. We wrote it down. We are focused on the fact base, but we fail if we deliver no insight from it. If we can present meaning and action, we are successful. If we merely deliver data, we aren’t doing our jobs.
Our clients appreciate us for this fact-based yet practical approach. In today’s data-rich and insight-poor environments, it’s important to have a partner to help sort through the morass.
Your bathroom scale may be able to send you data while you’re chowing down on fried chicken, but does that really matter if it doesn’t result in changed behavior? Knowing is only half the battle.
What do you think?